The Sourcing and Consultancy Playbooks

The UK Government has clear expectations for how contracting authorities and suppliers should engage with each other, and has published guidance for these relationships in The Sourcing and Consultancy Playbooks. While the guidance contained within each Playbook is aimed at Central Government agencies, the policies should be considered as ‘good practice’ by the wider public sector. Within this post we offer a summary of the key policies included within each playbook.

The Sourcing Playbook

The Sourcing Playbook contains guidance on outsourcing, insourcing, mixed economy sourcing and contracting, and aims to deliver the following:

• Getting more projects right from the start

• Development of robust procurement strategies

• Engagement with healthy markets

• Contract with suppliers that want to work with the public sector

• Be prepared for when things go wrong

To achieve these outcomes, The Sourcing Playbook provides 11 key policies that all central departments are expected to follow.

The Sourcing Playbook’s 11 Key Policies

1. Commercial pipelines - Contracting authorities will ensure the market is aware of all upcoming projects and publish pipelines for next 18 months as a minimum, with the aim of sharing plans for the next 3-5 years. This gives your suppliers plenty of time to make enquiries, gain a better understanding of the market, and make arrangements for joint bids before contracts have been published.
2. Market health and capability assessments - Strategies and contracts should be designed to help maintain a healthy market – by addressing barriers to entry, taking advantage of innovations, and promoting competition. With this policy more focus will be placed on simplifying processes and making the market more accessible
3. Project Validation Review (PVR) - New initiatives that are likely to lead to major projects, shall go through a PVR - which now also applies to all complex outsourcing projects. It consists of independent peer reviews early in the project lifecycle, and ensures experts have the opportunity to assess, discuss, and challenge proposed strategies. By relying on the guidance of more experienced third parties, the feasibility of a project can be reviewed with greater scrutiny.
4. Delivery Model Assessments (DMA) - The use of DMAs is seen as good practice, and helps to ensure contracting authorities use evidence-based processes to determine the best delivery model for projects.  A DMA (formerly known as a ‘make versus buy assessment’) can be used to help contracting authorities decide if insourcing, outsourcing or a combination of these will offer the best outcome for their needs.
5. Should Cost Models - The use of Should Cost Models (SCM) will be used to forecast whole life costs and risks of proposed projects. The use of SCMs aims to prevent ‘low-cost bid bias’ and help ensure the most thorough and well-planned bids achieve the best scores.
6. Requirement for pilots - Where contracting authorities are outsourcing a service for the first time, a pilot should be run as part of a thorough programme of testing before deciding on a long-term delivery model. Testing is a significant factor for the public sector, and making greater use of pilots will ensure the right solutions receive investment, while also providing authorities with valuable analytical data.
7. Key Performance Indicators (KPIs) - New projects should include KPIs that are both relevant and proportionate to the size and complexity of the contract. By introducing KPIs, contracting authorities can provide greater clarity of their expectations while also limiting misunderstanding/mistakes.
8. Risk allocation - By working with suppliers at an early stage, risks should be addressed and have solutions developed to mitigate these before publishing contracts. Risk allocation then determines which parties will assume each risk.
9. Pricing and payment mechanisms - Working to establish the best pricing based on delivery of outputs, work value or supplier performance. Pricing should reflect the level of certainty or risk around the scope and requirement.
10. Assessing the economic and financial standing of suppliers - The economic and financial standing of suppliers will come into consideration to safeguard the delivery of projects. These assessments will be conducted as part of risk management activities and are tailored to each specific project - with the aim of being proportionate, fair and not overly risk averse.
11. Resolution planning - Focuses on mitigating the impact of insolvency of projects. While major insolvency is rare, this new risk management measure requires suppliers of critical public service contracts to provide resolution planning information.  This will help ensure contracting authorities are prepared should anything go wrong and there is a risk to the continuity of projects or services.

You can access The Sourcing Playbook on GOV.UK by following this link.

The Consultancy Playbook

The Consultancy Playbook was published alongside The Sourcing Playbook to offer further guidance to help contracting authorities engage with consultants more effectively, achieve better outcomes, get better value for money and improve the transfer of knowledge and skills.

The outcomes identified are:

• Understand when consultants can add the most value
• when necessary, set our procurements up for success
• achieve more favourable outcomes when going to market
• be a more effective client of consultants while building meaningful relationships with our suppliers
• improve Civil Service capability by maximising knowledge generation and transfer across the contract lifecycle

While there are no new policies for consultancy services, there is a lot of useful information in The Consultancy Playbook about the considerations contracting authorities need to make, and what they should look for from a consultant.

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